2015 is here and the country that adopted me, Panama is once again projected to have very good economic growth. The IMF is predicting GDP growth of 6.4% while the World Bank is predicting GDP growth of 7%. If you hear projections like that it makes you think that Panama can be untouchable.
The Panama economy is not alone in being predicted to have good economic growth in 2015. Here is the break down of both the IMF numbers and the World Bank numbers.-
Thank the United States!-
Many equate this to the projected GDP growth of 3.1 in the United States predicted for 2015. Yes the American economy is just to the North but there is much more to the Panama economic growth. The possibility that the good American economy is keeping our economy growing in 2015 seems to be a far stretch. Since the crash, the US economy has been in shambles as the Panama economy has surged ahead.
Could it be the low interest rates in the USA over the last few years? Possibly, but like many others I thought the USA economy would suffer greatly if QE was taken away in 2014. Instead we have lower oil and people getting a much needed breather. How long it lasts before the Federal Reserve needs to save their buddies again remains to be seen.
The Real World Panama Economy-
Like many of you I experienced the real estate crash in the United States. I lived in Tampa from 2006-2008 and saw what happens when a bubble forms and blows up. It was a very uncomfortable time as people who were credit rich, no longer had access to their home equity and credit cards.
I bring up this point because I see a very similar economy forming in Panama. Commercials for credit cards, low interest rates, 1.5% down to buy a house, cars being purchased with very little down and people maxed out financially.
All around me rain forest is tragically being cleared for real estate projects. The easy credit is prompting Panamanians to buy as much real estate as they can to invest in. Does it sound familiar?
The Panama Canal Expansion-
The expansion of the Panama Canal is almost complete! The workers might strike occasionally but the Panama Canal is about to be able to double its traffic. This huge national project will continue to fill the national coffers for years to come.
The Nicaragua Canal-
I will believe it when I see it. My friends on the ground say it will never happen. If it does happen then the government of Nicaragua is much more capable then anyone thought. My guess is that the proposed canal across Nicaragua will spark another civil war. I am hoping that the government of Nicaragua cancels the project instead of risking war and destroying their beautiful country.
Business in Panama-
From my perspective as a business owner everything seems great with the Panama economy. We are bringing on new clients monthly for our advertising and social media services. Many of our clients are in the high end real estate business. They are all predicting a good 2015.
Part of the reason for this, is the amount of Venezuelan and Colombian expats living in Panama bringing their wealth with them. My wife and I joke that when we go to the high end mall MultiPlaza in Panama City that we have been transported to Caracas, Venezuela.
Business is a pleasure in Panama. Especially for those of us who do not need a store front. Low taxes, available residency, low cost labor, access to low cost products and a decent cost of living.
Moving to Panama-
Is Panama really the best place in the world to retire to? Is it the best place to live? You would think so with all the rankings that Panama tops each year. Don’t believe the hype, check for yourself. I love Panama and will stay here as long as I feel welcome. Come visit, have a coffee with my Anabell and I, we guarantee that you will be much more informed than before you came. There are many amazing expats across the country that will happily help you out at no expense.
Residency and Incorporation-
If you plan on doing business here or want to check out the residency options you will need a lawyer. Our lawyer is Shiara Stevens. If you have not read my article about residency in Panama then that would be a good start.
Will the Panama Economy Continue to Defy Reality?-
I have been living in Panama for 4 years. Since the first week I was here, I could not believe what I was seeing. The Panama economy seems to defy everything I have ever learned about economics. Will it continue at this break neck pace? I hope not, for the environments sake. : )
Information from the IMF.
Information from the World Bank.http://www.randyhilarski.com/